How Will Cadillac Maintain Affluence In A Blue Collar City?

Holding aside the whole irrelevant "snowflake" business (yes, those kinds of people do exist, but it's also used by misanthropes to dump on the concept of compassion), there has been a lot of discussion on this topic of moving cities.

I would say the move to New York, coupled with other comments made by the leadership team, indicated a change in the right direction for the mindset of the company.

In terms of whether or not that made a material impact on the quality of the product? The pessimist in me says "no", the optimist in me says "we didn't get a vehicle fully developed under those conditions to find out".

Cadillac is indeed better suited, in its current state, to Warren, Michigan than New York City. But, in my view and the view of previous Cadillac leadership, that's part of the problem.

The world of high-luxury, and the tiers to which Cadillac aspires, does not operate or revolve around Warren, Michigan. Period. It revolves around New York, London, Tokyo, Hong Kong, Singapore, and Paris. And to a lesser extent, cities like LA (which I find more gaudy and tasteless than true luxury), Chicago, and Shanghai.

There are some who don't want Cadillac to change, and to them I say fine, in the context of global luxury, get used to being second-tier for people who can't afford or don't know any better, and don't expect the prices or profit margins either.

Others want Cadillac to transition and ascend to take its former place alongside the world's best, and to them I say, Warren, Michigan is the last place to live if you want to understand what that world is like and how to exist in it.

Cars are not made in Rich Neighborhoods - Rich People do not put their houses near Auto Assembly plants -

The title of this item is simply WRONG. WHere are car is made - or even designed - has little or nothing to do with its CLASS.

Disagree, in part.

Where the car is built is irrelevant, as long as the quality and standards are there. I wouldn't expect rich people to live near auto plants either.

Whether the car is DESIGNED or CONCEIVED however, is much more relevant. In theory, it shouldn't matter either, but in reality, where you live has an impact on your mindset and standards. It would be one thing if it were New York vs. Chicago or even Dallas. But New York vs. Warren, Michigan? That's night and day on opposite sides of the spectrum.

It's not the sole fact that Cadillac is in one city or another that inherently affects its product, its how that city shapes and defines the standards and perspective of the people in charge of designing the product.

Maybe that doesn't (or shouldn't) affect "class" as you define it, but as defined by the standards of the luxury world, especially the auto industry, it does.

Agree w/you Tom. Most folks who buy luxury cars have no clue where their made, it’s simply not an issue. Getting an excellent product for your money is what counts. For a luxury car buyer what the vehicle says about you, IMO, is a very high component of that decision. Mercedes has their reputation (cost is no object engineering, which is no longer accurate)and BMW theirs (ultimate driving machine – no longer accurate either), Audi came up with Quattro but still doesn’t have the legacy like the other 2. The other Lux cars, Bentley, RR, Maserati, Ferrari, Bugatti, especially Porsche all evoke something when we hear those names. Cadillac is making good cars, but they need to be great to overcome the competition which has established their benchmark and is not sitting still waiting to be over taken. I loved my ATS 3.6 Premium as it was a better car than either the C or the 3 in 2013 when I got it, but that was short-lived. They also need to address the life cycles better as when the new C arrived in 2015 everything else was in the rear-view mirror and are still there. Caddy needs a strong refresh, perhaps after 2 years, they are the challengers not the champions, they need to work harder than their opponents. This move from NYC back to Detroit is an unnecessary distraction. They just need to get every product right which means class leading interior luxury, fabulous exterior styling, and competitive powertrains all at a better value, bean counters be damned. Even if they lose money short term they’re building a better beast. Make “Gotta have” cars…with names.

Most of what you say bears out. Cadillac has to make themselves the Standard of the World again.

I just think people misunderstand what that standard is. The XTS is not the Standard of the World, nor was the DTS, the Catera, the Seville, the Allante, and maybe not even the Fleetwood. In my opinion the ATS, while better than all rivals in handling and driving and I would argue design too, was not the best all around offering in the segment, due to lack of refinement and build quality/materials, especially inside.

The Standard was something like the 1957 Eldorado Brougham. But the equivalent to that car today is a Rolls-Royce Ghost, or an S-Class Maybach, or Bentley Flying Spur, maybe a 7-Series or standard S-Class, if you want to compare it to more mainstream offerings.

Cadillac has nothing NEAR that, and I argue they don't even have the MINDSET to even begin to develop something like that. Some of it is beancounters, yes. But some of it is attitude and perspective. I'm talking about people who think it's okay to throw plastic on the door pockets or bottom of the center console because "no one's gonna look down there", or people who use noisier motors for seat and steering wheel adjustments because they're cheaper, or people who rummage the GM parts bin to find a window switch to save 5 cents.

To bring it back to the topic, I am betting that attitude is made WORSE, not better, by the move back to Warren, MI. Did New York make it better? Hard to say, given the short amount of time spent there, since the influence on the product would take longer than 4 years to become measurable. I didn't notice a change in the vehicles myself.

When you live and work in Warren, MI, and you're surrounded by PBR bars and Super 8s, vs. New York, where you're surrounded by expensive craft cocktail lounges and the St. Regis, how do you think that's going to affect someone in charge of designing a vehicle to appeal to the high net worth individuals of the world?

I'm not saying one is better than the other, certainly not in the grand scope of things. I'm only staking my claim that it WILL have an effect for the WORSE on the ultimate direction of the brand and its cars going forward. Time will tell.

While I agree with parts of what you said, I know many folks at GM, Ford, Chrysler and when VW was in Detroit, VW. They routinely dismantle their competitions products so everyone is aware of what is world class, what isn't and what might pass for world class. That said for decades GM had legacy costs that were so extreme the culture there was bottom line and short term profitably. I'd say their products could not be built and competitively priced to produce margins to keep them at the forefront of world class. Today the bankrupcy changed that but IMO they still have a culture there that is intrenched. Where the cars are designed really doesn't matter nor is where they're built and today robots probably build more of a car than PBR swillers. GM is globally renowned for having an insane amount of engineering horsepower. Clearly the unions in the 80's-bankrupcy created an atomosphere where quality suffered and hopefully that is in the past.

When the ATS arrived it was a great car and very competitive. The 3.6 was strong, the 2.0 Turbo was stronger than anything from Europe. Since then "reviews" bring up harshness,etc... (all BMW's and MB's require premium fuel yet the ATS does not, that said with premium I experienced no harshness with regular, I did) but it was celebrated car at the time. I drove every car and compared them feature for feature, powertrain for powertrain, value for value it was a great car. Did it have issues, sure back seat (that no one ever sits in on any car this size) and engines (addressed by new V6's in 2016).

They absolutely need better marketing as for over 100years Cadillacs were revered globally largely for style, regardless of parts bin. Clearly it is viewed that BMW and MB build ONLY BMW's and MB's so its interpreted as not having any parts bin to draw from which makes them better??

The pedigree is there and needs to be managed better and vehicles need to be world class.

Pedigree is huge, I just hope the it's the one from the 50s and 60s, not the 80s and 90s.

I also hope the people at GM are doing the competitive analysis you speak of. I hope they're sitting in an S-Class or a 7-Series, or even a Bentley Continental right now and saying "look at this switchgear, look at these fit and finish lines, look at all the places there's leather, look at the design lines" etc. etc. It just doesn't seem they've been doing that.

But as you said, it's the bean counters. One of my favorite auto personalities once said a car company is a company of lawyers and accountants, the designers and engineers just work there. That's been a huge problem with GM. Maybe they really do understand how to cater to the 5% or the 2%, regardless of where they're headquartered, they just have been set free to do it. I hope that's the case, because it would be much easier to loosen the purse strings than to change an entire cultural mindset.

Truthfully, I don't care if the car is BUILT by PBR swillers, I care more about whether it's DESIGNED by them. Actually, I really don't even care about that, as long as it competes with luxury industry standards. For all I know, Dr. Dieter Zetsche is pounding Natty Ice regularly, but it doesn't show in his products.

I'm continuing to do three things.

1: Draw a correlation between the culture, attitude, and mindset of luxury, and the design standards and direction of the product.

2: Draw a correlation between surroundings and standards of living, and the understanding of, and even the ability to understand, a luxury lifestyle and high net worth clients.

And 3: Draw a correlation between Manhattan and an atmosphere of luxury conducive to influencing relevant broad cultural perceptions, as distinct from the atmosphere in Warren, MI.

If any one of these three things are incorrect, my assertion and predictions for the future are not valid.

Once again, I agree with much of what you lay out. I knew Gary Cowger ( https://www.bloomberg.com/research/stocks/private/person.asp?personId=1491765&privcapId=433871117 ) who was a mentor of Mary Barra whom I met when she was VP of HR. She is a GM lifer and her dad was as well. When Ford brought in Alan we all marveled they brought in an outsider. Then Mary got the job and during one of my meetings she said her #1 priority was culture change. At Ford I think it occurred and GM is still working thru it and the bankruptcy did more to change the company than any one person. GM, IMO, desperately needs to return to fabulous styling, elevate to world class interior aesthetics, off the chart’s quality, competitive powertrains at extraordinary value. People will buy with these elements, why wouldn’t they? The time is now as the bankruptcy removed so much of their legacy costs that crippled their competitive abilities. When I was a kid GM had 51% of the US market where today it rests at about 17%. I also remember only a couple years ago they were giving significant bonuses to Exec’s if they could elevate back to 29% market share. I see no reasonable reason Cadillac cannot be a major force in the 2 biggest markets in the world, China and the US if they do the above. It won’t happen overnight, but their Y product strategy might be a good plan. I’ve not seen a new XT4 yet, but I really hope this vehicle and the roll outs to come are “more” than we hope for.

I agree with TomM. If they make a great product, it does not matter where it is made, designed, etc. GM has design centers in many global locations. Other foreign automakers have design centers in CA.
My problem is that Cadillac changes directions like a tennis ball. "We are going to introduce a competitor to the S-Class. No we're not." "We will add a sedan above above the CT6. No we won't." "We will move to NY....for awhile."
It is hard to understand what a Cadillac is today or what they stand for. Luxury brands have consistency.

True. Cadillac has been "coming back" since the Allante. It's disheartening. Whenever they seem to have good ideas, they either can't execute it (a "good enough" attitude, enforced by bean counters), or they change their minds at the last minute.

Actually, in the counties around Detroit there is a lot of wealth. Bloomfield, Ann Arbor etc. Just the city is in the pits. GM's real problem is the bean counters have too much power, and this move puts Cadillac too close to them. Not good.

Again, just being in New York was not inherently a reason to buy the car, and Cadillac never said it was (though some young people might be turned on to the idea).

It's because New York offers a perspective and lifestyle that helps inform product and design decisions in the direction towards global luxury standards.

I'm going to address your question in a serious manner, because I will presume that is how you asked it, as we are all reasonable grown people having pleasant thoughtful discussion on the interest developments in the automotive industry.

I do not work for Cadillac or any other automaker, though the premise is amusing as you point out.

There is some truth to the fact that driving isn't a part of life in New York City. However, my assertion is that many other ineffable qualities relevant to the luxury goods business are incubated and bolstered by the presence of that lifestyle in New York City.

I think Cadillac knows how to make a good CAR, but they don't know how to make a good LUXURY ITEM, and they haven't since the late 60s. Thus, the knowledge intended to be imparted by the move to New York City would help augment their experience and capabilities in that space, at least that was the intention.

Take the pinnacle of luxury automobiles, Rolls-Royce. They understand how they fit in to the larger luxury lifestyle of their customers. They understand bespoke, they understand multiple homes and multiple cars, they understand private air travel, they understand fine dining, they understand isolated boutique resort vacations, they really really "get" that luxury space. They understand how that influences their clients' tastes, standards, and needs with any luxury good or any interaction in the luxury space. On top of that, they understand how a car of Rolls-Royce's nature fits in to that lifestyle as well.

Therefore, they can create a vehicle (some would say an entire experience) that exquisitely meets the automotive needs of their clients, and is perfectly at home with their high net worth lifestyle. If either one of those were not up to par, they would not be successful.

Of course, they have the engineering skills to back that up, and they put them to use addressing the needs of their clients, which as I mentioned they perfectly understand. As an example, the entirety of the new Phantom's unibody architecture is double-walled, just so they can cram sound-deadening foam in between and surround the occupants.

Now, Cadillac (and indeed no other manufacturer, with the possible exception of Bentley and Bugatti) are quite up to that standard, but the same principle applies. A Cadillac designer should know that plastic and (interior) parts-sharing are anathema to high net worth customers. The engineers should know smooth and quiet go hand-in-hand with torque and horsepower. Cadillac engineers can absolutely execute on that, assuming they're given the space to do so, and are of the right mindset to know to apply their talents in that direction.

There was a great Allan Mulally quote from when he took over Ford as CEO. The accountants will have a seat at the table, but they will not be the deciding vote."
Wish this were always true.

AMEN!

What an utterly stupid question.

Cadillac maintaining affluence depends on the products it puts out NOT where it's headquartered. They could be designed in Barstow California and as long as they are good products they will maintain Cadillac's affluence.

The way forward is an increase in size, reduction in price, increase in standard amenities, smooth and abundant power, gorgeous styling, and a return to names.

Bravo!

cadillac is not and has not been luxury unless you are a lame rapper or midwestern out of it person who doesn't want a suburban for years. nobody who is looking for a luxury car is going to even look at a cadillac unless they are 75 and cross shopping a lincoln. when the magazine shills tried to hype up the ATS and CTS and the rest of those lamer mobiles 5-6 years ago everyone could see why they did it: they are in the pocket. so it was funny to read them lamenting how cadillac had many months supply of said vehicles a year later. why? because they are gm products meaning they are depreciation nukes and because the interior quality is gm level and because the electronics are wonky. even slowly fading lexus is still several levels ahead of cadillac in perceived luxury and real reliability. they have to reboot or rebrand as higher end suv/cuv providers or they will expire. who in their right mind would buy a used cadillac? a wannabe mafioso or some backwards cap wearing douche trying to look like the have money. that's about it.